Leveled Off: Why Your Debt Ceiling Can Crack Your Credit Score

Have you ever wondered why your credit score isn't doing so well?

How about that feeling as though your score should be better than it actually is, and not sure exactly how to fix it or what the problem is?

Everyone has been in that situation where your score is sagging, and you're thinking long and hard about how you want to fix it, but aren't exactly sure where to start.

And if you don't believe your credit score is important, you'll change your tune quickly when you try to buy a house, car or any other sort of credit or borrowing comes to the table, and you're turned down because of that very score.

The reasons your credit score isn't improving (or in fact getting worse) has a lot to do with the simple and the more challenging. One of the more common and avoidable credit score killers is paying your bills 30 days or more late. Late fees are one thing, but once you crack that 30-day threshold, you start to get in a little more hot water with creditors as a result. You could have that black mark on your report and thus face a score that is dwindling from the 700 plus mark (considered to be ideal) to in the mid to low 600s, which according to most credit check websites is under the “needs work” umbrella.

Digging a little deeper, you could find, too, that you just simply have too much debt and your debt to income ratio is high. You should have a debt to income ratio of about 70 percent to 30 percent (debt). The other element that you can’t overlook is your debt and what your ceiling is as far as credit limits are concerned.

If you are on the books for $10,000 in credit card debt and the cards and lines of credit you have totaled $10,000, that means your credit spacing or gap from owed to what can be borrowed is far too close (or in this case exactly matching perfectly).

Needless to say, that’s not going to help your credit score, either.

As for your credit score, the number itself, you can’t overlook just how paramount those three digits truly are. They define you as far as how you handle money overall in the eyes of creditors, who may, if the score tells a different story, think twice about handing you over a loan that you’ll eventually need.

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